Kalshi and Polymarket win preliminary injunction against Minnesota
A federal judge on July 27 granted Kalshi, Polymarket US, and the Commodity Futures Trading Commission a preliminary injunction blocking Minnesota from enforcing its prediction-market felony law against the two platforms. The state law was set to take effect August 1. The ruling shields the CFTC-registered exchanges from criminal penalties while the underlying legal challenge proceeds, though the block is explicitly preliminary.
The Minnesota win gives Kalshi and Polymarket their first federal-court preemption victory, directly countering losses in New York and Washington. For both platforms, this restores breathing room in one market while they fight adverse rulings elsewhere. The judge's narrow reasoning matters: by leaving open whether some contracts could still qualify as illegal gambling, the decision invites states to craft tighter restrictions rather than wholesale bans.
Kalshi and Polymarket must now defend divergent outcomes in multiple circuits simultaneously, with each state victory or loss previewing the other's legal trajectory. The Second Circuit appeal remains the bet for restoring a unified federal shield, but more states may act before that court rules. Legal budgets stretch across Michigan, Illinois, Kentucky, and New Mexico as platforms face market-by-market survival decisions.